Skip to content
Back to index
V0651-17 14 March 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · comunidades de propietarios

Homeowners' associations must not charge VAT or apply income tax withholdings on extraordinary levy receipts

A query was raised regarding whether homeowners' associations must itemise VAT or income tax (IRPF) on expense and extraordinary levy receipts. The Directorate-General for Tax (DGT) ruled that they should not charge VAT as they are not considered business entities, nor should they apply income tax withholdings because these payments do not constitute taxable income.

The question raised

The receipts issued by homeowners' associations to said entity, which taxes must be mandatorily itemized

The DGT's ruling

Homeowners' associations are neither entrepreneurs nor professionals for VAT purposes, and therefore act as final consumers and cannot charge the tax nor deduct input tax. Regarding Personal Income Tax (IRPF), payments for extraordinary assessments or community expenses are not income, but rather the fulfillment of an obligation to contribute to the maintenance expenses of the property. Consequently, there is no obligation to apply withholdings or payments on account.

Book your free first meeting